Google Staredown With FTC May Result In FTC Blinking

from the if-you-don't-have-a-case... dept

Back in October, we wrote about a report that the FTC was preparing to file antitrust charges against Google. In trying to find out more, the story kept shifting. First, we heard it was all about "search manipulation" in putting Google-related info on top of search results (i.e., search for a location and a Google Map shows at the top of the page). Then, there was some talk about how it was going to focus on how recently-purchased-by-Google Motorola Mobility was abusing standards-essential patents. If it was the latter, that seemed like a weird way to go, since it was so unrelated to Google's main business. Similarly, the whole "search manipulation" claim seemed odd. What kind of "harm" is it when someone searching on Google for an address is shown a Google map. It seems like it actually benefits consumers.

Also, for all the talk of Google hurting others, I just don't see it. I'm constantly surprised at how rarely it seems that Google-related results top the list of searches on relevant things. Every time we bring this up, we see people claim that Google should be taken down for favoring its own services when people do searches, but we so rarely see that. Just as an example, I just did a Google search on "browser" and this is what I see:

An ad for IE and then Firefox... and then Wikipedia. Chrome doesn't check in until fourth.

How about airplane travel, since that's a key one (Expedia is one of the companies driving the case against Google):

Google stuff seems nowhere to be found. Instead you have Expedia up top. In second place you have Kayak... the company that powers Microsoft's travel search. So... I'm at a loss.

Talking to a number of folks in DC concerning this, I keep hearing the same story over and over again. They're all variations on the following: FTC boss Jon Leibowitz is getting set to leave the job (and go into the private sector, of course), but would like a "defining moment." Somewhere in the last year or two, he decided that going after Google for anti-trust violations would be such a crowning moment. As such, he brought on a number of folks to help him do that, including Tim Wu, who had just written an entire book basically saying that big companies are bad. While I respect Tim, and agree with him on lots of things, I've never understood his argument here. It just makes no sense. Earlier this year, the FTC also brought on outside litigator Beth Wilkinson, which seemed like a clear statement of plans to sue.

And ever since then they've been trying to come up with something. And, from the sound of things, generally turning up nothing. So, if you're Liebowitz and have effectively made a big bet on going after Google, what do you do? One strategy might be to leak a bunch of stories about how the FTC is all set to sue Google... and then tell Google that it better "settle."

Yes, the FTC may have taken the patent troll technique: threaten to sue, but agree to "settle" at a price that is less than it would cost Google to defend, such that the FTC can claim a "victory." Over the last month or so, it's appeared that the FTC was really just hoping Google would play its assigned role and cough up some cash and Liebowitz could claim victory and ride off into the sunset (or cushy corporate job, whichever pays more). In fact, I'd guess there are still decent odds that this happens. Google may well decide that it's cheaper to just pay up and get this behind it. But, from the articles coming out this week, it appears that (1) Google may be willing to call the FTC's bluff and (2) the FTC may be realizing that Google knows it doesn't have the goods to bring a successful anti-trust case to completion.

Either way, it's pretty sad that we're reduced to this. If there was a clear case of consumer harm via unassailable market control, then antitrust activity could make sense. But there seems to be no evidence that we've seen to support that. Consumers, for the most part, seem pretty happy with Google. If they didn't like Google Maps popping up when they searched on an address, they could use any number of other search engines. Personally, I'd find it a lot more annoying if I was forced to see other mapping offerings. Google Maps works for me, and when I search on an address, it's what I want.

So, really, who is the FTC protecting? Consumers? Doesn't seem like it. Google competitors? Is that really the FTC's job? Jon Liebowitz's legacy? Is that what's become of the FTC these days? Really?